The Nepali capital market is gearing up to receive new fund offers worth Rs 1.4 billion soon.
Two mutual fund managers have already submitted their prospectus for approval at the capital market regulator — Securities Board of Nepal (Sebon). NMB Capital that has planned to issue a mutual fund scheme worth Rs 600 million has already submitted its prospectus for approval. Likewise, Siddhartha Capital — the fund supervisor of Siddhartha Investment Growth Scheme I — is also seeking approval for another scheme worth Rs 800 million.
"We have prepared everything necessary for the fund's offering and are waiting for the regulator's go-ahead," said CEO of NMB Capital Shreejesh Ghimire.
NMB Capital — merchant banking arm of NMB Bank — will launch NMB Sulabh Investment Fund with a five-year tenure.
"We have submitted the plan to issue units worth Rs 600 million and have plans to invest in both equities and fixed income securities," informed Ghimire.
"We are planning to get the issues allotted and listed at the stock exchange before Dashain, provided we are granted approval by Sebon soon," he added. The scheme is expected to provide 13 per cent return in the first year.
At present, Sebon is mulling over the prospectus of NMB Capital's and Siddhartha Capital's new mutual fund schemes.
"The board is reviewing their prospectus and will take a decision shortly," said spokesperson for Sebon Niraj Giri.
"Laxmi Capital — merchant banking subsidiary of Laxmi Bank — has also applied for approval for its mutual fund custodian and supervisor, so that it can move along with preparing the mutual fund scheme," added Giri.
Siddhartha Capital will launch Siddhartha Equity Oriented Scheme worth Rs 800 million with a five-year tenure. The scheme will invest both is equity and fixed income securities such as bonds, debentures and fixed deposits.
The close-ended scheme will have 60 per cent to 80 per cent equity instrument and the remaining fund will be invested in fixed income securities such as government bonds and debentures, among others.
Mutual funds are considered the best instrument for rookie investors to dabble in the capital market.
As investors can invest in professionally managed portfolios with little capital, it is thus suitable for inexperienced and risk aversive investors. Each unit is priced at Rs 10, so even with Rs 1000, an investor can purchase 100 units unlike shares whose face value usually stands at Rs 100.
At present, there are 125 million mutual fund units listed at Nepal Stock Exchange that are traded regularly. Siddhartha Growth Investment Fund I, launched back in November, 2012, has 50 million units listed.
Siddhartha Growth Investment Fund I was the first mutual fund in the capital market after the promulgation of the Mutual Fund Regulation 2067 by Sebon.
Likewise, Nabil Balanced Fund I — managed by Nabil Bank's subsidiary Nabil Investment Banking — has 75 million units listed at the stock exchange.
Along with Laxmi Capital, recently, Global IME Bank was also granted approval by the regulator to sponsor mutual funds. More mutual funds can be expected in the near future as the government has made mutual funds a non-taxable entity.
source:THT
